China’s economic growth slowed to a three-year low in the fourth quarter, highlighting mounting pressure on the world’s second-largest economy as weak domestic demand, a prolonged property downturn, and structural imbalances continue to weigh on the outlook. Official data released by the National Bureau of Statistics (NBS) showed that China’s gross domestic product (GDP) grew 4.5% year-on-year in the fourth quarter, easing from 4.8% in the previous quarter and marking the slowest pace in three years. While the figure slightly exceeded market expectations of 4.4%, it underscored fading momentum toward the end of the year.
For full-year 2025, China’s economy expanded by 5.0%, meeting the government’s target of around 5% and marginally beating analysts’ forecasts of 4.9%. However, the composition of growth revealed persistent weaknesses. Consumption and investment remained subdued, with December retail sales rising just 0.9% year-on-year, missing expectations and slowing from November. Fixed asset investment contracted 3.8% in 2025, while property investment plunged 17.2%, reflecting the deepening real estate crisis that continues to undermine consumer confidence.
Industrial output provided some support, growing 5.2% in December, while exports remained a key pillar of growth. Analysts noted that China’s external sector, aided by a relatively undervalued yuan and strong shipments to non-U.S. markets, helped offset weak domestic demand. China recorded a near $1.2 trillion trade surplus in 2025, underscoring its heavy reliance on exports at a time of fragile global growth.
Market reaction was cautiously positive, with the Shanghai Composite Index rising up to 0.6% after the data release. Still, economists remain skeptical about the sustainability of growth. Many believe authorities will continue to deliver incremental stimulus rather than aggressive measures, aiming to keep growth hovering just below 5%.
Looking ahead, China’s economic outlook remains uncertain. A Reuters poll suggests growth could slow to around 4.5% in 2026, as rising global trade protectionism, ongoing property sector weakness, deflationary pressures, and geopolitical risks add to challenges. Without stronger policy support for households and consumption, analysts warn that China may face a prolonged period of managed slowdown rather than a robust rebound.


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